Correlation Between China Life and Chongqing Sulian
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By analyzing existing cross correlation between China Life Insurance and Chongqing Sulian Plastic, you can compare the effects of market volatilities on China Life and Chongqing Sulian and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China Life with a short position of Chongqing Sulian. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Chongqing Sulian.
Diversification Opportunities for China Life and Chongqing Sulian
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Chongqing is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Chongqing Sulian Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Sulian Plastic and China Life is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China Life Insurance are associated (or correlated) with Chongqing Sulian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Sulian Plastic has no effect on the direction of China Life i.e., China Life and Chongqing Sulian go up and down completely randomly.
Pair Corralation between China Life and Chongqing Sulian
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.71 times more return on investment than Chongqing Sulian. However, China Life Insurance is 1.4 times less risky than Chongqing Sulian. It trades about 0.05 of its potential returns per unit of risk. Chongqing Sulian Plastic is currently generating about -0.05 per unit of risk. If you would invest 4,096 in China Life Insurance on September 25, 2024 and sell it today you would earn a total of 58.00 from holding China Life Insurance or generate 1.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
China Life Insurance vs. Chongqing Sulian Plastic
Performance |
Timeline |
China Life Insurance |
Chongqing Sulian Plastic |
China Life and Chongqing Sulian Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Life and Chongqing Sulian
The main advantage of trading using opposite China Life and Chongqing Sulian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Chongqing Sulian can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Chongqing Sulian will offset losses from the drop in Chongqing Sulian's long position.China Life vs. Kweichow Moutai Co | China Life vs. Shenzhen Mindray Bio Medical | China Life vs. Jiangsu Pacific Quartz | China Life vs. G bits Network Technology |
Chongqing Sulian vs. China Life Insurance | Chongqing Sulian vs. Cinda Securities Co | Chongqing Sulian vs. Piotech Inc A | Chongqing Sulian vs. Dongxing Sec Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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